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What's in Store for FireEye (FEYE) this Earnings Season?
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FireEye Inc. is set to report fourth-quarter 2016 results on Feb 2. Last quarter, the company posted a narrower-than-expected loss. Let’s see how things are shaping up for this announcement.
Factors at Play
FireEye, headquartered in Milpitas, CA, is a global provider of web, email, file and malware security to both enterprises and governments. Lately, the company’s top-line growth has been affected due to its transition to the cloud and a shift in its business model from hardware centric to subscription-based services.
It should be noted that the company generates higher initial sales from hardware than subscriptions. Although a shift from product-based to subscription-based business model will lead to more stable revenues in the long run, we believe the transition will have a negative impact on FireEye’s results in the fourth quarter.
Furthermore, intense competition from other major and established players like Check Point Software Technologies Ltd. (CHKP - Free Report) and Palo Alto Networks Inc. may also negatively impact its fourth-quarter results.
Nonetheless, FireEye’s ongoing cost optimization initiatives, which include the closure of some facilities, headcount reductions and minimization of discretionary spending, should aid its bottom line in the fourth quarter.
Earnings Whispers
Our proven model does not conclusively show that FireEye is likely to beat the Zacks Consensus Estimate in its upcoming release. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: The Earnings ESP for FireEye is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 49 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: FireEye carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Twilio Inc. (TWLO - Free Report) , with an Earnings ESP of +8.33% and a Zacks Rank #3.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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What's in Store for FireEye (FEYE) this Earnings Season?
FireEye Inc. is set to report fourth-quarter 2016 results on Feb 2. Last quarter, the company posted a narrower-than-expected loss. Let’s see how things are shaping up for this announcement.
Factors at Play
FireEye, headquartered in Milpitas, CA, is a global provider of web, email, file and malware security to both enterprises and governments. Lately, the company’s top-line growth has been affected due to its transition to the cloud and a shift in its business model from hardware centric to subscription-based services.
It should be noted that the company generates higher initial sales from hardware than subscriptions. Although a shift from product-based to subscription-based business model will lead to more stable revenues in the long run, we believe the transition will have a negative impact on FireEye’s results in the fourth quarter.
Furthermore, intense competition from other major and established players like Check Point Software Technologies Ltd. (CHKP - Free Report) and Palo Alto Networks Inc. may also negatively impact its fourth-quarter results.
Nonetheless, FireEye’s ongoing cost optimization initiatives, which include the closure of some facilities, headcount reductions and minimization of discretionary spending, should aid its bottom line in the fourth quarter.
Earnings Whispers
Our proven model does not conclusively show that FireEye is likely to beat the Zacks Consensus Estimate in its upcoming release. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: The Earnings ESP for FireEye is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 49 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: FireEye carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
FireEye, Inc. Price and EPS Surprise
FireEye, Inc. Price and EPS Surprise | FireEye, Inc. Quote
Stocks to Consider
Here are a couple of companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:
CEVA Inc. (CEVA - Free Report) , with an Earnings ESP of +9.52% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Twilio Inc. (TWLO - Free Report) , with an Earnings ESP of +8.33% and a Zacks Rank #3.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>